JUDY WOODRUFF: It’s been almost three months since the president signed a new health care reform law. And, today, he was out making the case for its merits.
“NewsHour” health correspondent Betty Ann Bowser has the story. The Health Unit is a partnership with the Robert Wood Johnson Foundation.
U.S. PRESIDENT BARACK OBAMA: Just two generations ago…
BETTY ANN BOWSER: The president hosted a tele-town hall meeting in suburban Washington, where he addressed the concerns of seniors, one of those groups of voters most worried about how the health care overhaul will affect them.
BARACK OBAMA: What you need to know is that the guaranteed Medicare benefits that you’ve earned will not change. This new law gives seniors and their families greater savings, better benefits, and higher-quality health care.
BETTY ANN BOWSER: The legislation which Mr. Obama signed into law in March extends health coverage to 32 million uninsured Americans by 2014, mandates most people buy insurance or pay a fine, sets new regulations on insurers, and provides subsidies and Medicaid expansion to millions of individuals. It will also cut some $500 billion in future Medicare spending, something that has seniors very concerned.
Today’s town hall was the first of many events aimed at winning over a skeptical American public between now and midterm elections. Democrats and allies of the Obama administration are raising $25 million to set up a new tax-exempt group to head off criticism that might impact candidates in November.
A key part of the strategy is showing Americans how the law will benefit them. The president told seniors today the first batch of $250 rebate checks are being mailed to help millions of them when they fall into the coverage gap known as the doughnut hole.
BARACK OBAMA: It’s being phased in, but, by 2020, this law will close the doughnut hole completely. The doughnut hole will be gone. It will be gone.
BETTY ANN BOWSER: Seniors aren’t the only ones unsure about new law. Recent polls show more than 50 percent of Americans don’t like it. However, most people don’t want to repeal the legislation. That is something Republicans are trying to do in at least 30 states.
While much of the new law takes effect in 2014, the administration is already beginning to roll out some of its provisions, including a high-risk pool for those who are hard to insure. And most major insurance companies have agreed to allow parents to keep children on their insurance policies until they turn 26.
JUDY WOODRUFF: And more now about some of those changes that are already taking place or will be in the next several months.
Susan Dentzer is with us once again. She’s the editor in chief of the journal “Health Affairs” and an occasional analyst for the “NewsHour.”
It’s good to have you back with us.
SUSAN DENTZER: Great to be back, Judy.
JUDY WOODRUFF: Before anything else, let me ask you about something the president said. He said to these seniors today, “I want to assure you that your Medicare benefits are not going to change.”
At the same time, we are reporting there’s going to be a $500 billion cut in Medicare benefits in the future. How do you reconcile that?
SUSAN DENTZER: Not a cut in benefits. The $500 billion, people should understand, is a $500 billion slowdown in the rate of growth. Medicare spending is still going to grow substantially.
For the last couple of decades, Medicare has grown 4 percent per year per beneficiary. In the future, it will grow 2 percent per year per beneficiary. So, spending is still going to go up, including for benefits. It’s just that hospitals in particular aren’t going to see their payments rise as quickly as they would have otherwise.
And there will be other entities that won’t be paid quite as much as well, particularly entities that operate so-called Medicare Advantage plans. Their payment is going to change.
JUDY WOODRUFF: An important distinction here.
SUSAN DENTZER: An important distinction. And we don’t know, frankly, what that means for benefits. But when the president said, your guaranteed benefits won’t change, he’s correct. It’s some of the extras that some of these plans have provided that may or may not change. But, quite honestly, we won’t know that for several years.
JUDY WOODRUFF: Now, today, the president talked about, Susan, those $250 rebate checks. Who is going to get them, and how significant is that?
SUSAN DENTZER: Everyone who has drug spending high enough to fall into the so-called doughnut hole will qualify — will qualify for a check.
That means people who have total drug costs this year of $200 — excuse me — $2,830. So, what happens with this program is, first, you pay a $310 deductible. Then, from $310 up to $2830, the government pays three-quarters of your drug bills. You pay a quarter. Then it stops until you get total drug costs of $4,550.
This was not a huge innovation in benefit design. It was just a big hole to save a lot of money on the part of the government. So, what happens is, when you hit that $2,830 total drug spending now, you will get this $250 rebate check, which, of course, will just help a little bit, while you get through that doughnut hole. And then, when you get through the doughnut hole, you get broad coverage once again.
JUDY WOODRUFF: It’s a little bit, but they’re trying to get it out there quickly with these checks.
SUSAN DENTZER: That was the point. And, as was said, by 2020, the doughnut hole disappears altogether.
JUDY WOODRUFF: Now, let’s move on to another feature of health care reform moving — coming on stream. And that is expanding insurance coverage for children all up to the age of 26.
SUSAN DENTZER: That’s right. A number of the insurance provisions take place right away or very soon. And, as of September, essentially, all insurance plans were going to be required to offer coverage for dependents up to the age of 26.
Now, about 65 insurance companies stepped forward in advance of September and said, we’re going to do that now, particularly as people are leaving college or leaving school and going off health plans they might have in college and now are going to be able to enroll in their parents’ plans. So, this will start to phase in across the country.
If you’re an employer-provided insurance, particularly if your employer self-insures, it may not be the case that a child can be covered until January, when — which is typically when the new plan year starts. But, essentially, from now through January, we’re going to see a lot of younger adults becoming covered under their parents’ plans.
JUDY WOODRUFF: So, some movement in that area.
And, then, Susan, the so-called high risk pools, this is establishing insurance coverage for people with preexisting medical conditions, there’s some movement in that area.
SUSAN DENTZER: That’s right.
There are at least five million to seven million Americans who lack insurance now primarily because they have preexisting medical conditions. Usually, these are chronic conditions that are high-cost. And because the full-blown coverage plan doesn’t phase in until 2014, the government set aside $5 billion to either help states provide coverage for this population in so-called high-risk pools, or, if states didn’t want to do that, the federal government was going to come in and do it for them.
So, we now have that money on the table. And about 30 states have signaled that they want to take advantage of the money and use that to basically create their own pools, or augment, change some of their existing ones. There are another 20 or so states that have said, thanks, no — but no thanks. So, we honestly don’t know how many people are going to be able to be covered through them.
A bigger issue is whether there is enough funding appropriated for this purpose. And, in fact, $5 billion, by some estimates, may mean that only a couple of a hundred thousand people will be able to be covered under this.
JUDY WOODRUFF: Out of a potential much larger group.
SUSAN DENTZER: Five million to seven million. So, it may be — it may well be the case that Congress is going to have to go back at some point and reexamine the funding or some of the provisions that are required of this high-risk coverage, because the coverage has to be relatively generous under this federal program compared to what it is under many existing state programs.
JUDY WOODRUFF: Susan, you watch this whole area so closely. There — you were telling us earlier today there are other things happening now in the health care delivery realm, beyond the things that we have just talked about.
SUSAN DENTZER: That’s absolutely right.
One of the most important goals of the legislation is to bend the cost curve, basically slow the rate of growth of overall health spending, and achieve more value for the dollars that we spend on health care. So, a lot of this is going to be accomplished by reforms of the health care delivery system.
So, you’re — Americans are going to start to hear about concepts like accountable care organizations and the medical home, new features, new ways of organizing health care that the — that the new law allows and indeed in some senses compels to happen.
So, there’s a lot of ferment now in the hospital sector in particular, as people are looking at this, thinking, how should we reorganize ourselves for the new delivery systems and the new payment systems? And that’s going to have an impact on the way many Americans receive their health care, and hopefully for the good.
JUDY WOODRUFF: In just a very few seconds, there are a number of people who don’t like this, a number of attorneys general, states around the country, that are trying to repeal it in several states.
Can you give us just a quick sense of where those legal moves stand?
SUSAN DENTZER: Most of those cases have targeted the so-called individual mandate, which is the provision that will take effect in 2014 that compels people to have health insurance or pay a penalty.
And many of the states’ attorneys general argue that that’s unconstitutional. There’s a lot of difference of opinion on that, though. And I think the preponderance of the constitutional thinking is that, actually, the federal government is allowed to do this under the clause of the Constitution which gives it the right to regulate commerce among the states.
But, of course, that will be up to the courts. And we will see what happens.
JUDY WOODRUFF: The health care reform conversation keeps going on.
SUSAN DENTZER: It does indeed.
JUDY WOODRUFF: Susan Dentzer, thank you for helping make it all clearer for us.
SUSAN DENTZER: Thanks, Judy.